The Sincerest Form of Flattery...

This post appeared on Craigslist the other day. It's funny enough that you should click through to Flickr to read the details:



We thought it was awesome, so we created a proper home for it on the wall at the Zvents office:



Humor aside, this raises a key point about Web 2.0. The same factors that mean that "two guys and a router" can build a business like Facebook in ten days and have it take off, mean that two more guys and another router can build a business and compete with your cool new business.

There are only three ways to get to market differenation: Technological advantage, network effect, or marketing-driven aggregation of eyeballs. There are great examples of success in all three categories; but there are no examples of success that didn't pull off one. And we all know that the first two are waaaaay cheaper than the third.

It's a marathon, guys. Keep running.

Comment Hurdles, Zipless Fucks, and the Extended Conversation

At the end of a great review of Zvents (Thanks!!), Zoli Erdos points to my blog and says,

"the last link happens to be Ethan Stock, Zvent CEO’s blog. Hmm… I don’t see any way to leave a comment or trackback – what happened to the “conversation”, Ethan?"

I thought about posting a snarky comment on his blog, but this is what faced me:



Yuk.

Zoli, it was easier to come here and write this post than it was to face that. You're linked to me, I'm linked to you. That's a conversation.

What's going on here, is the empirical demonstration that anonymity and conversation are inimical to each other; and that in order to participate in a community, you must commit and invest resources. In the classic phrase of Erica Jong, there is no 'zipless fuck' in the Extended Conversation.

Zoli has a blog, and I read it. I have a blog, and he reads it. We can converse through links and references. Each of us has put some time and effort (commitment and resources) into building up this presence in the community, and cautiously, bit by bit, each of us is willing to invest time and energy and possibly a RSS subscription or a delicious bookmark to the other.

Comments on blogs were conceived in a simpler time, or with a simpler mindset, that said that anyone should be able to drop in and speak their mind - the zipless chat. But spammers infected that ideal, as sure as hepatitis and AIDS ended Erica Jong's free-love early 70s.

This isn't a sad story -- community and relationships and investment still yield great results, and if we want unexected, serendipitious conversations with each other, the best way to do that works even better in this era of the Internet -- face-to-face, the old-fashioned kind of communal commitment.

What Kind of Society Are We Building?

I've spent much of the last six months heads-down building Zvents. I am incredibly excited about the opportunity to build a great new product that will, in some small way, change the world and make users happy. Users are these slightly foreign beings to us product-builders, and sometimes it's hard to get inside their heads and understand what their real concerns are. When I read something like this New York Times article on Wal-Mart's HR practices:

"...The [board] memo acknowledged that Wal-Mart, the world's largest retailer, had to walk a fine line in restraining benefit costs because critics had attacked it for being stingy on wages and health coverage. Ms. Chambers acknowledged that 46 percent of the children of Wal-Mart's 1.33 million United States employees were uninsured or on Medicaid.

Wal-Mart executives said the memo was part of an effort to rein in benefit costs, which to Wall Street's dismay have soared by 15 percent a year on average since 2002..."

I am stunned. How can any user be thinking about movies, or bands, or Little League games, when their kids don't have healthcare? Will they ever use Zvents? Not likely. Wal-Mart is the largest U.S. employer and regularly held up as a paragon of new business practices. Why isn't Wall Street worried about the 46% of Wal-Mart kids who don't have health care? Even in the most narrow commercial view, aren't those kids the future customers and employees of the Wal-Marts of the next generation?

Henry Ford single-handedly created the 20th century social compact in 1914 when he unilaterally raised the minumum wage of his workers to $5 per day, reasoning that if his workers couldn't afford to buy the cars they were building, the great hamster wheel of capitalism might stop spinning:

On January 5, 1914, Henry Ford announced a new minimum wage of five dollars per eight-hour day, in addition to a profit-sharing plan. It was the talk of towns across the country; Ford was hailed as the friend of the worker, as an outright socialist, or as a madman bent on bankrupting his company. Many businessmen -- including most of the remaining stockholders in the Ford Motor Company -- regarded his solution as reckless. But he shrugged off all the criticism: "Well, you know when you pay men well you can talk to them," he said. Recognizing the human element in mass production, Ford knew that retaining more employees would lower costs, and that a happier work force would inevitably lead to greater productivity. The numbers bore him out. Between 1914 and 1916, the company's profits doubled from $30 million to $60 million. "The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made," he later said.

There were other ramifications, as well. A budding effort to unionize the Ford factory dissolved in the face of the Five-Dollar Day. Most cunning of all, Ford's new wage scale turned autoworkers into auto customers. The purchases they made returned at least some of those five dollars to Henry Ford, and helped raise production, which invariably helped to lower per-car costs.

We're a tiny little company at Zvents, and soon we'll have a health care plan in place for all our employees. Not just for the highly-paid engineering types, but everyone. Wal-Mart can do better, and if they don't, and if Wall Street doesn't lengthen its short-sighted view, the hamster wheel might start slowing down.

Update on Cringely's Bad Math

Following up on my highly skeptical response to Cringely's "the sky is falling" web-hosting post, Brad Gibson, who designs data centers for a living, dropped me an email suggesting that I check out his blog. Here's a sample of his analysis:

Cringely overstates the actual (as opposed to the name-plate rated value) power consumption of the drive arrays by at least double. He also gets muddled up when he discusses data center floor space; mixing up total square footage with the square footage of the connected load space. He uses an incorrect approach to calculating "necessary" space to support "equipment" space. He makes some incorrect assumptions about the types of drives used in many of the arrays. The Cringely argument also completely overlooks load diversity in a data center.

Check out Brad's excellent piece here.

Brad's post also pointed me to the coverage of the Cringely piece on Memeorandum.

Three Postulates: The 'Long Tail' <> User-Created Content

At this point, anyone who is reading this blog has seen Chris Anderson's 'long tail' graphic so many times that I can *not* post a link to it, and say, "the yellow kind of clashes with the red/pink background, don't you think?" and you'll all be able to bring up a mental image in your head.

Let me tweak your memory further. Remember Chris' examples? The two key ones that stick in my mind were Amazon's catalog, with that fantastic quote to the effect of, "half the things we sell in a given day, we only sell one of"; and Netflix's movie rental business, where 'infinite shelf space' enables even the most obscure movies to add to the bottom line of the business.

Sure, Ethan. So what's your point?

Well, may I humbly point out that pretty much none of the items for sale on Amazon, or for rent on Netflix, are user-created in the sense that all we Web 2.0 junkies think of user-created content. None of them are user-created in the way that blogs are user-created. They're all commercial movies, or commercial books or toys or power tools, that may be rare and obscure, but were created by some professional organization with commercial intent. You do not see things like Harry Potter Fan Fiction making up even a small part of Amazon's long tail. Why is this? Not to be mean or anything, but intellectual property issues aside, there's an obvious grammatical error in the first nine words of the top-rated Harry Potter story on that site, and it doesn't get much better after that.

Let's look at another bastion of user-created content, Slashdot. Slashdot works like this: It has a home page, and a set of topical sub-pages, which are run by editors. They choose what stories make it on to those pages, and then all and sundry comment on the stories, and moderate each other toward nirvana or oblivion. Note that the stories are a) written by someone who is not a Slashdot reader and b) edited / selected by someone who is not a Slashdot reader. Slashdot readers then, with either great enthusiasm or great skill, but rarely with both, comment on the articles, adding a valuable corona of information around the core star of the article.

Are crowds wise? Sure they are. But we all agree that committees are stupid, and isn't a committee just a small crowd?

Ethan's First Web 2.0 Postulate:

"The most successful new businesses will not be built on user-created content, but will utilize it extensively."

Google is a perfect example of this postulate in action. They crawl the web extensively, and aggregate everything they can find. They then apply relevance algorithms such as hubs + authorities to decide which pages to serve up. These relevance algorithims are, as several people have recently twigged to, social software -- aka user-created content. (Note: I blogged about this in late June -- I guess I need more readers!) However, the content which we are seeking via Google - the stuff which the users are ranking through their links -- is almost always professionally created content with commercial intent, although much of it comes from the very long tail of obscure professional content.

Interesting, huh? Google takes on the one hand, an index of all the content out there (most of the useful stuff professionally created) and then adds a relevance algorithm based on what a bunch of users think of that content, and voila! market-leading search. Then they add a bunch of professionally created ad content, and add a relevance algorithm based on what a bunch of users actually think of those ads, and voila! A $106 billion in market cap.

Does this story sound vaguely familiar? How about Amazon's professional-content store, with a heavy wrapper of user opinion and review? How about eBay's professional content marketplace, with a heavy wrapper of user opinion (seller and buyer ratings) plus user-specified value algorithms in the form of final auction prices? I think I see a trend.

Ethan's second Web 2.0 postulate:

"The number of users who will usefully comment or vote upon a topic is one to two orders of magnitude greater than the number of users who will usefully create content for that topic."

Since we all know about Metcalfe's law and its new-meme supercharged cousin Reed's law, which Fred Wilson has been talking about, it's clear that if we want to build highly scalable value in the network, we might be better off focusing on capturing user opinions at scale, rather than capturing user content at scale.

Huh. I kind of think as I write these (snarky readers will respond, "We can tell, Ethan," while super-snarky readers will respond, "Not that we can tell, Ethan"), and I've just realized Ethan's Third Web 2.0 Postulate:

"Every time I think hard about where the web is going, del.icio.us seems right in the middle of it."

Cringely's Math Makes No Sense

I read Robert Cringely compulsively - he's a lively writer, a deep thinker, and totally plugged in to several frontiers of technology. But every once in a while (as with his July column on Skype) he makes claims that are not just wrong, but ludicrously wrong.

Here's the essence of his last column, which I have condensed to save you the three minutes I wasted reading it:

"A lot of money is being bet on a future user computing experience based on web services" but "the cost of keeping [user] data online all the time will be huge. It's an energy crisis in the making." "202 million [U.S.] Internet users..." * "a free Gmail account with two gigabytes of storage..." = "400 petabytes. That's 400 times the current capacity of the Internet Archive."

"that's really only about $25 million in disk drives..."
+ "total power consumption up to just under 10 megawatts, which at typical U.S. industrial power rates will cost about $5 million per year."

"This is the kind of planning and provisioning required to support FREE services...That's a heck of a lot of ads."

"My point here is that we're entering another period of Internet exuberance...the Internet will change even more than it has the ways we live and work. But it isn't going to come easy and it isn't going to come cheap."

Huh? Cringely just wrote that the big portals can create a kick-ass email service for *every single internet user in America* for a disk drive cost of $25 million, and an annual power cost of $5 million. Generously speaking, let's say that the total capex would be $125 million and the total annual opex would be $25 million (5X on both his numbers). That's a capex per user of 62 cents, and an annual opex per user of eight cents. And he says this is a problem? Dude, that's two postage stamps!

There are three great systems of analog user-created content creation and distribution in place today. They are the U.S. Mail, the phone system, and the camera/photography/film infrastructure. Voice, text, and images, analog-style. To give Cringely as much slack as possible, let's look at the smallest and cheapest, film photograpy. I called a knowledgeable friend, who told me that in the United States, there are about 25,000 minilabs for processing photographic film, and that the average cost of these labs is about $200,000. That's a capex of $5 billion. And that's just for photo prints at your local Walgreens, CVS, or Ritz Camera. If we assume one $10 per hour clerk full time to run each of those minilabs, our annual opex is $500 million. Don't forget that behind those minilabs are film plants, paper plants, distribution networks, and SuperFund sites.

By any wild stretch of imagination, the new digital infrastructure being put in place will be vastly cheaper, both to build and to run, than the old analog infrastructure that it's replacing.

The value of that infrastructure, compared to its cost, is incredible: Cringely carps that $30m is "a heck of a lot of ads" the day before Google announced that they'd just sold $1.05 billion worth of ads in their last quarter alone.

Wake up, Robert, and smell the bits.

TechCrunch BBQ 3: This Dog Got his Dinner

Michael and Keith threw a great party for the 3rd TechCrunch BBQ. It's kind of amazing how fast things are moving out here - Just as an example, I met both Kevin Burton and Jeff Clavier for the first time at the second TechCrunch BBQ, and I've seen each of them so many times in the past few weeks that they're starting to feel like old friends.

I have been deeply conflicted about the whole Web 2.0 buzz. I think that a lot of us who have just been trying to build great products for the past 10 years feel like a dog that's been patted and kicked intermittently, and we're not quite sure if it's time for dinner or a beatdown. So everyone is working their tails off, but mixing it in with ongoing self-mockery and self-reflection. At my first startup ('96), we took to calling ourselves "the last software company" as we watched a bunch of "web" companies take over, take off, and fall off a cliff. Now Zvents is running as hard as it can, while looking around at some of the fluff and saying, "maybe we're... kind of... a web 1.3 company?" The Web 2.0 conference made things worse, not better. It was crazy -- at $2900 a head or whatever they were charging, it drew some people who think too much about money, and not enough about building stuff. People who needed to be talked to in big ballrooms by reassuringly profitable, public, branded figureheads, before going out to open-bar parties hosted by a bunch of cool 19-year-olds and saying, "so this is what '99 was like."

No, actually. For it to have been like '99 would have taken a lot more MBAs, a lot more New Yorkers, a lot more 24-year old sociology chicks making $150K in high-tech PR, with a vast fog of general cluelessness about technology AND business overlaying it all. Thank God it wasn't anything like that bad.

With all that angst rattling around in my head, Michael's party tonight was amazingly refreshing. It was pretty much entirely populated by real, genuine, Silicon Valley people. Startup people. Big company (Google, Yahoo, IBM, Ebay) people. People who've built stuff, and done stuff, and made things happen. People who understand that you have to cooperate to make standards, and compete to make great products. People who know that elegant solutions to computationally hard tasks matter, and that compelling end-user experience matters too. It felt very real. There are some great products being built, and we got some fascinating peeks at What is Yet To Come.

I feel much better about this whole Web 2.0 thing after tonight. This dog got his dinner.

P.S. A few pictures:




See Kevin's Feedblog for details on Dave Winer's $20

This post should probably be tagged techcrunchbbq or techcrunchbbq3 or somesuch.
It's the Tag Guess Dance, aka Bubble Up from the Bottom, Baby!

Kosmix.com, Vertical Search for Healthcare, Launches

All of Web 1.0 continues to be reinvented around the search paradigm. Healtheon/WebMD, watch out: Today, Kosmix.com launches to provide healthcare search. I know two very smart search engineers there, Jason Zien (from IBM's WebFountain) and Ram Subbaroyan (from Inktomi). Kosmix is founded and funded by the Junglee/Cambrian nexus, and I expect them to kick some serious booty.

Chris Law Interviews Yahoo Developer NW's Toni Schneider

Chris just pinged me and said that his podcast interview with Toni Schneider is up over at WSFinder. Toni, who was CEO of Oddpost before its acquisition by Yahoo, now runs the Yahoo Developer Network. If you're curious where this whole "web as platform" meme is going, knowing what Toni thinks is a big chunk of the answer. Toni discusses the Yahoo Music Engine, Rollyo, Confabulator, Flickr, commercial terms for APIs, and a lot of other stuff. It's a pretty interesting listen.

3rd TechCrunch BBQ This Friday

Michael is taking the wrappers off of Edgeio. Lots of cool demos. Loads of interesting people. Check it out on Zvents:

Web 2.0 -- amateur vs. professional?

Matt Marshall at Silicon Beat wrote a great, link-rich post on the open/closed debate of Web 2.0. Among other things, he cites Nicholas Carr's essay, The Amorality of Web 2.0, where, among other things, Carr shreds what he calls the 'cult of the amateur':

In theory, Wikipedia is a beautiful thing - it has to be a beautiful thing if the Web is leading us to a higher consciousness. In reality, though, Wikipedia isn't very good at all. Certainly, it's useful - I regularly consult it to get a quick gloss on a subject. But at a factual level it's unreliable, and the writing is often appalling. I wouldn't depend on it as a source, and I certainly wouldn't recommend it to a student writing a research paper.

I think that Carr is right. I think that amateurs are unrealible. One of the most fascinating little plays of the Web 2.0 conference for me was watching people's reactions to Barry Diller's talk. Diller is a very savvy billionaire media mogul, who has pulled off bigger bets against longer odds than anyone else who spoke at the conference - including the founders of eBay and Google. Diller made what I consider to be some obvious statements, like, "there's only so much talent in the world," suggesting that there are limits to what amateurs can accomplish. In several subsequent conversations, people went out of their way to criticize Diller, shaking their heads and mouthing variations upon, "he just doesn't get it." These being the same people who mouthed salutations about Terry Semel's respectable, by-the-book defense of Yahoo's experts+amateurs, us+users positioning in the marketplace.

Well, Diller is right, and I think that Tim O'Reilly knows it. O'Reilly, after all, is possibly the man most steeped in open source on the planet -- and most open source projects are the creations not of a diligent factory of excited amateurs, but rather the crafting of a small, dedicated group of professionals who are working outside the established structures of traditional software firms. Apache wasn't written by a herd, and Ruby on Rails is largely the creation of one really smart guy. If anything, open source proves not just the appalling common denominator of the amateur, but the opposite - the transcendence of the truly talented. I liken open source to the kind of flowering that took place during the scientific revolution in England -- a relatively small group of really smart people working together openly to create some truly revolutionary advances, and then a much larger group of people taking advantage of the new climate to make the world a better place.

I believe in the value of user-created content. But I think that value is centered in, and almost entirely contained by, the province of opinion. Voting. Editorial. Commentary. Not core content, not data. We've got a hybrid us+user model at Zvents, and I'm happy if that makes us Web 1.5.

What's different about Web 2.0? Left Replaces Right

Remember Web 1.0? All the graphs went up and to the right:



Like in this Google Image Search

But now we're in the vastly better Web 2.0...

Where all the graphs go up and to the left:



Like in this Google Image Search

Yeah, it's a different, different world.

Web 2.0 Hype? Stewart Butterfield and Chris Law Bet On It

At the closing reception for the Web 2.0 conference (Thanks, Yahoo!) I introduced Chris Law, a founder of Tribe Networks, to Stewart Butterfield, who founded Flickr. As the three of us chatted, it became apparent that Stewart and Chris have very different views of where we are in the Web 2.0 hype cycle. So different that with some small incitement from me, they agreed to a $20 bet, to be paid at next year's conference. I'm the judge and this blog post is a virtual holding-of-stakes. Here's the bet:

Stewart: "This is likely the top of the hype, and even if it isn't, by next year it is going to feel so overdone that the name will have to change. This conference will still happen, but it will be called something other than Web 2.0 and look a lot more like an ETech."

Chris: "This is nothing like the top of the hype; this conference will not only happen next year, it will still be called Web 2.0 and will be bigger and crazier than this year."

Stakes: $20.
To be paid: Next year's conference.
Proof point: Officially the name of next years' conference, but I think all three of us will know who won the bet no matter what it's called.

Web 1.9? Blog search is kind of broken

This whole Zvents launch has made me realize that blog search has a loooong way to go. For the first time, I was really trying to find everything (OK, everything important) in the blogosphere about a particular topic. I started with Technorati. I used Feedster. I tried pubsub, IceRocket, and Bloglines. The overall experience was frustrating and only moderately successful. People told me that they'd blogged about me, and I couldn't find their posts. Caterina Fake from Flickr runs or has run four different blogs, it turns out - Flickr, MyWeb 2.0, Bizwerk, and Caterina.net. I only knew about three of them, and couldn't find her post. Finally I did - by searching for her name on Yahoo. (Thanks, Caterina and Y!, for the post *and* the search!) Despite the fact that Bizwerk is a blogspot blog, it mysteriously does not appear to be indexed on Technorati - or at least Caterina's post on our Zvents calendar widget doesn't turn up.

This is a mess, guys. I know we're letting a thousand flowers bloom here, but some serious gardening is needed!

Cool new discovery - tracking how many people have bookmarked Zvents (and what terms they use) on del.icio.us is a really interesting buzz meter. If delicious tracked bookmarking activity over time, they'd have an even MORE interesting relevance engine than the one they're already building. As usual on del.icio.us, this is an awesome function that's completely opaque to mere mortals -- as far as I can tell, the only way to generate an explicit box and button for "show me tags for this URL" is to have already successfully done it once. (follow the link and look at the bottom for the magic box). And now that I look at it more, the magic box doesn't seem to do that. What, pray tell, does "Check URL mean?"

Maybe we're only to web 1.9.

Zvents, not Z e vents!

I knew that launching the coolest new local event search on the web with a name similar to an obscure calendaring product produced by a Swiss company was going to be a problem. Silicon Beat just wrote about us (Thanks!) got our URL wrong (Aargh!!) and then fixed it inside 90 minutes (Thanks!) This whole Extended Conversation thing is real....

Web 2.0: It's just a conference

I've been to quite a few conferences, and both for the ones I've attended and the ones I haven't, there's often this feeling as the time draws near that This is the Center of the Universe, and Great Things Will Occur. Well, it usually turns out that a conference is just a conference. Great things may occur -- you're seeing an enormous conncentration of activity timed to these three days, including the launch of Zvents -- but that isn't really happening "at the conference". I just sat through my first workshop session (never mind which one) where I saw some really smart guys present (with moderate success) some software that they've worked really hard on. This will be repeated, ad infinitum, for the next three days, with occasional wonk-fests about XML over HTTP, and at least one great moment that would have been great to see, if it hadn't cost so damn much to me bere. So even if this is the center of the universe, (a doubtful proposition at best) I keep reminding myself, the universe is a very large place.

Zvents Launches!

We turned on the lights at Zvents at ~2 am Pacific time last night. No passwords, no beta. Five minutes later, we had our first registration. Web 2.0 is cool. So I actually got a little sleep before the Web 2.0 conference started. The game’s afoot!

It's all happening! Yahoo buys Upcoming.org

Yahoo buys Upcoming.org.

Events are a particularly exciting area of human knowledge -- chock full of rich local, social, and temporal data. People want to find out what's going on near them, know what their friends are seeing and doing, and plan their outings. And they want to do it when they want, wherever they are, on any device, in a way that's relevant to them.

Paul Levine and the folks over at Yahoo! Local are very smart. They've demonstrated that yet again with their focus on the social aspects of events and the opportunity to integrate in with personal content (360) groups (Y! Groups) and the extensive set of venues in Y! Local. This is a nice integration element for them, and Andy and team are a great fit. This space gets hotter every day - and Zvents launches tomorrow!